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Gambling with ground meat
February 20, 2008

The recent news that workers at Hallmark/Westland Meat Packing Co. abused downer cattle, resulting in the recall of an astonishing 143 million pounds of ground beef, reminded me of boilerplate remarks Chipotle CEO Steve Ells made at the beginning of a recent conference call to report Q4 and year-end financials. The CIA-graduate said that the company (CMG) is resolved to work with vendors who do not mistreat animals. Yesterday, in a neatly timed press release announcing the chain's move to naturally raised beef in Minnesota units, Ells reiterated his point of view:
   
"We are changing the way the world thinks about and eats fast food ... Our commitment to working with like-minded suppliers who share our belief that food should be raised with respect for the environment, the animals, and the people involved is helping us make superior quality food, including naturally raised meat, accessible and affordable so everyone can eat better."

Downer: 143 million pounds of this stuff recalled.

   
"Aw," the hard-boiled burger-chain exec may have once snarked before dismissing such notions as PETA-tinged apostasy. Cows are cows,after all, merely hamburger on the hoof. Today, that executive has probably changed his or her mind, and not necessarily because a sudden change in disposition toward four-legged creatures. It's more likely due to Chipotle's astounding success. Among the 14 "high-growth" companies Houston-based SMH Capital follows, for instance, the Mexican grill chain posted annual same-stores sales of 10.6 percent last year. Only Texas Roadhouse (TXRH) came close, posting (in comparison) a paltry 2.7 percent.
 

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Speaking of ground beef, VICORP-owned Baker's Square is currently promoting an LTO dubbed a "Crush Burger" in Cleveland units only. Crush refers to "hand-crushed, seasoned, and seared under high-heat," according a press release (ill-timed, it seems, given the recall mentioned above). In an act of marketing desperation or savvy, the chain promises customers a free meal if they don't agree the new sandwich is the best they have ever tasted. 
   
Why test this promotion in Cleveland instead of, say, Columbus, Ohio, or even Denver, where the company is headquartered?  I have my theory. Cleveland, where I live, is in bad shape economically; sub-prime mortgages foreclosures, for example, are among the highest in the nation. Two years ago, the U.S. Census Bureau ranked the city the poorest in the country. Median household income here is about $25,000 annually. 
   
So it stands to reason that some people may be tempted to hop over Baker's Square just to sample the burger and, one might imagine, find it wanting after eating half or even most of it. As mentioned, the press says, "If customers don't agree that the Crush Burgers are the best burgers they have ever tasted, Bakers Square will replace it with any other single menu item valid up to $8.99." 
   
The offer is valid on the "same visit only." Well, of course. I'll take that to go, please.  
   
Ergo, VICORP can devise a strategy for dealing with such "complaints" (two bites, OK; three, you own it) and may even get a feel for how many meals they'll be replacing once the limited-time offer goes national.

Posted by David Farkas on February 20, 2008 | Comments (1)